A tourism bed tax could be introduced in Birmingham to help fund a huge investment programme in the city’s cultural sector.
Council leaders are considering ways in which visitors staying in hotels might be asked to pay a £1 a night levy.
The money raised, which would run into millions of pounds a year, would be placed in a subvention fund and used to attract creative industries to the city as well as reinvesting in the existing hotel stock.
It could also help to subsidise major sporting events including, possibly, the European Athletics Championships.
Talks about the tax are at a very early stage, but initial proposals are based on setting up a unique Business Improvement District.
Rather than the usual entities based on all businesses in a clearly defined area, the new BID would cover all of the main hotels in Birmingham.
The idea is linked to a council project, the Creative City initiative, which aims to use a variety of fund-raising methods to promote cultural attractions including three new galleries and a public square around Curzon Street Station and the planned high speed rail terminus at Eastside.
Coun Tim Huxtable (Con Bournville), cabinet member for regeneration, said it was likely that the tourist tax would be voluntary.
He added: “We are exploring the possibility of a bed tax and discussing this with the hotel industry. It is a very interesting idea and is something that often operates overseas.
“The city council pays a lot of money to get conferences to come to Birmingham and hotels and local businesses benefit from economic growth, which is fantastic, but we would like a voluntary contribution to help us do even more.”
However, Coun Huxtable admitted there were “a lot of issues to be ironed out”, not least how to sell the bed tax to hotels in Broad Street and the city centre which already contribute an annual levy because they are in Business Improvement Districts.
He also plans to announce details of a £5 million council creative industries fund which companies will be able to use to finance expansion plans.
Birmingham Chamber of Commerce chief executive Jerry Blackett gave the idea a guarded welcome.
“It is at least something worth talking about. These are difficult times and we have to be a bit creative. There were plenty of sceptics over BIDs, but they have worked. I wouldn’t say this was a fanciful idea at all,” he said.
Mr Blackett added that a tax was only likely to be accepted by the hotel industry if money raised was ring fenced and used for new leisure-based investment as well as better marketing of Birmingham’s business and leisure tourism.
The notion of a voluntary tax fits well with a council push towards encouraging rich philanthropists to help fund the creative industries, according to leisure, sport and culture cabinet member Martin Mullaney.
Coun Mullaney (Lib Dem Moseley & Kings Heath) added: “Visitors wouldn’t have to pay if they didn’t want to, but we expect that most people would be prepared to contribute a pound. It’s a bit like a voluntary service charge on a restaurant bill.”
With at least 20 hotels currently planned or under construction in Birmingham, even a small bed tax would bring in several million pounds a year.
The chairman of the Birmingham-Solihull Local Enterprise Partnership, Andy Street, told guests at the launch of the Creative City initiative that more businesses would be attracted to the West Midlands if the quality of life was good enough.
He said the LEP’s main aims were to:
• Create a fund to build on existing public sector funding of the arts through loans, grants, match-funding and investments.
• Help deliver a new museum quarter at Eastside, including a new museum of photography and the development of a new contemporary art gallery.
• Explore ways to unlock private sector and philanthropic support for culture.
Existing cultural businesses and potential newcomers will be invited to bid for a share of the government’s new £100 million Catalyst fund.
Mr Street added: “We want to create an environment which attracts businesses to invest here and existing ones to grow. Having a world-class cultural and creative offer is key to achieving this.”
But he stressed that a “creative and cultural renaissance” would depend partly on raising match-funding donations from wealthy private individuals based on the American system of public subscriptions through philanthropic gifts.
He added: “We have looked at the factors driving success and all first class city regions have an outstanding cultural offer distinguishing them. This is crucial for the quality of life.
“It is totally appropriate for a city whose origins lie in manufacturing creativity and whose resurgence lies in cultural renaissance to think about how we can stretch culturally and drive leadership as far as we can push it.”
Culture Minister Ed Vaizey, who attended the launch, said he was “passionate” about philanthropy, but he believed the mind set of most people had to be changed to promote the idea of making financial contributions towards the arts. Councils had to be more prepared to ask for donations.
?Next page: New Ikon gallery to be part of arts village
Birmingham’s Ikon art gallery is to launch a second venue at the heart of a new city centre creative industries village despite a similar venture in nearby Digbeth being forced to shut when Birmingham City Council pulled its funding.
The Ikon2 will be one of three new galleries based around a new square by the historic Curzon Street Station at Eastside as part of the wider Creative City scheme launched this week.
Ikon Eastside in Digbeth shut in April after £200,000-a-year funding was withdrawn as the council cut its arts budget from £12 million a year to £10.2 million. The museum’s sister venue in Brindleyplace saw contributions reduced by 15 per cent at the same time.
Next to the Ikon2 a museum of contemporary art and exhibition space will be created with works from leading artists and sculptors David Hockney, Anthony Gormley, Henry Moore, Francis Bacon and Bridget Riley under a scheme designed to take pieces from the national art collection out of storage and put them on show.
The Curzon Street Station building itself, which is set to become an entrance for the new high speed rail terminal, will house a museum of photography to display a selection of pictures from Birmingham Central Library’s vast photographic archive.
Completing the square is the Thinktank Museum – widely expected to be renamed Birmingham Science Museum next year.
Ikon director Jonathan Watkins said: “Like similar projects in Berlin, Abu Dhabi, Barcelona, Sao Paulo and Shanghai, Curzon Square will make the city irresistible for tourism, business and business tourism.”
He said it would help keep talent in the city and enhance the quality of life for all residents.
He added: “This development will be phased with an estimated completion by 2020.”
It is the first major initiative from the new Greater Birmingham and Solihull LEP, a group of council and business leaders set up to replace Advantage West Midlands as a driver of economic development in the region.